A

Asset

What a person owns, such as cash, stocks, bonds, real estate, savings, or investments, and any personal possessions that can be turned into cash.

Asset Allocation

Diversification of your investments, usually between U.S. and international equities, fixed income, real estate, and commodities.

ATM

Automated Teller Machine. A machine you can use to deposit money, withdraw money, transfer money between multiple accounts, etc. You can find ATMs everywhere these days, including in the lobbies of banks, in grocery stores, inside restaurants, and at sporting events.

Auto Insurance

Automatic Clearing House

The automated clearing house is how electronic transactions are processed when a person selects an electronic debit or credit of funds. These are most common with payroll direct deposit and automatic bill payments.

Automatic Payment

If you have a savings or checking account with the same bank that issues your card, you may be able to automatically transfer money from your bank account to pay a credit card bill. Automatic payment eliminates the risk of paying a bill late and being assessed a late charge.

Available Credit

The unused portion of credit that falls within the consumer's applicable credit limit, if any.

Average Daily Balance

(Including or excluding new purchases.) This is the most common method of calculating interest. To figure out your average daily balance, the bank adds up the amount you owe for each day of your billing cycle and divides that number by the number of days in the billing cycle (see Billing Cycle). New purchases may or may not be added to the balance, depending on the individual card's terms. The most favorable calculation excludes new purchases.

B

Bad Credit

Poor credit rating. Things that damage your credit rating include late or missed payments, exceeding the credit line on cards, defaulting on loans, or declaring bankruptcy.

Balance

The amount of money you owe the card issuer. This includes purchases, fees, interest, and transaction charges.